EDF’s plant gets designation under regulated asset base model
Private investment is key hurdle for ambitious atomic plans
The UK’s long-planned Sizewell C nuclear station took another step forward when the government approved its eligibility for a state-backed financing mechanism.
Business Minister Grant Shapps designated Electricite de France SA’s power plant under the regulated asset base model, according to a letter released Monday. That’s considered critical for attracting private investment and reducing taxpayer risk for a project that’s been in the works for a decade and has a price tag of at least £20 billion ($24.1 billion).
The move follows Chancellor of the Exchequer Jeremy Hunt’s reaffirmation of support for Sizewell C in his statement to Parliament this month. Hunt announced that the government and EDF would sign contracts in the coming weeks. Earlier this year, former Prime Minister Boris Johnson said the government would invest £700 million in the development stage.
The regulated asset base, or RAB, model has been used for major infrastructure projects such as Heathrow’s Terminal 5 and the Thames Tideway Tunnel.
Adding new nuclear capacity is key to Britain’s plans to eliminate carbon emissions from its power grid in the coming years. Nuclear power can offer a steady, predictable supply of low-carbon power that can serve as backup for the rapidly expanding fleet of wind farms.
Johnson’s administration set a goal of delivering eight new reactors this decade — requiring approval at a pace equivalent to one a year. A construction program of this scale hasn’t been achieved in Europe since the French in the 1970s.
Sizewell’s predecessor, Hinkley Point C, is the first British nuclear power plant to be built in decades. It’s costing more than expected and taking longer to build than planned, stoking concerns about whether the government is right to rely so heavily on the technology.